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Botswana’s Minergy aims to supply coal to SA in 2019

04 Dec 2018

Minergy, a coal mining and trading company, is leading the Masama Coal Project in Botswana. The project is now progressing at a fast pace and is expected to supply coal to the SA market by February 2019, according to businesslive.co.za.

The Masama mine, which is situated near the small village of Medie at 50km north of Gaborone, has a life of 100 years and is expected to produce 2.4-million tons per year.

Minergy is the first company to hold a mining licence for an open-pit coal mine in Botswana, where diamond mining is especially popular. The country currently only has one colliery which is in operation, and it supplies the Morupule power station.

Despite the Botswana government’s limited experience in coal mining, the coal project is said to be moving along successfully.

“The progress has been exceptional. We’ve met all our self-imposed targets and we’ll be in production in February, six months after receipt of the mining licence. That’s unheard of,” said Minergy CEO Andre Bojé.

The first coal production will be supplied to South Africa. John Astrup, Minergy director and GM, said that Masama holds great advantage over other South African coal producers to supply industrial users in the northern parts of the country – such as cement makers, despite being located in another country.

“Of all the Botswana coal, we are about as far south as you get; we are closest to the cement market,” he said.

The company plans to be listed on the London Stock Exchange’s Alternative Investment Market (AIM) once the project is in production, which, according to Bojé, is necessary to increase production to 2.4-million tonnes a year by the end of next year.

Minergy chief financial officer Morné du Plessis pointed out that the company had raised 100m pula (around €9.5m) in Botswana, but raising further funding in Botswana was limited.

“In London, they could give you anything from £10m to £25m,” he said. “That’s significant money and that’s when you can do acquisitions or open another mine. It fits with our growth strategy.”

Bojé said that coal is currently an attractive investment, adding: “During the past 18 months, thermal coal prices increased by 33%, making it one of the world’s top five highest-performing commodities.

“The price of coal is rising, there is a deficit in supply and a strong demand, especially in the developing world, which is driving up the prices and keeping them high.”

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